AGCC Report on Full Tilt: "Example of Regulation Working as it Should"
A report by former British Gambling Commission Chairman Peter Dean evaluating the actions of the Alderney Gambling Control Commission (AGCC) surrounding Full Tilt was released on Monday. Despite players in the United States being separated from their funds for a year, Dean concluded, “Deplorable as the episode covered in this review has been, it is nevertheless an example of regulation working as it should. As soon as plausible evidence of irregularities came to light, the regulator acted promptly and proportionately.” Read the report.
PocketFives has learned that no deal will occur on Tuesday. Groupe Bernard Tapie lawyer Behn Dayanim told PocketFives, “No comment other than to say nothing to announce today.”
A source close to the negotiations told PocketFives last week that a deal could be imminent.
AGCC commissioned the study in December, three months after it revoked Full Tilt’s license due to the regulatory body believing that it had been misled. The paper walked through each of the actions the AGCC took regarding Full Tilt’s licensing, oversight, suspension, and eventual reprimand.
Early on in the 12-page report, Dean discussed how the AGCC licensed each of Full Tilt’s entities – Filco Limited, Oxalic Limited, Vantage Limited, and Orinic Limited. Dean then noted that the AGCC “launched a special investigation into FTP to determine the appropriate regulatory action [regarding]the accusations in the unsealed indictment” stemming from Black Friday. Interestingly, the agency did so on April 20th, five days after the U.S. Government targeted PokerStars, Full Tilt, and Absolute Poker.
The AGCC’s investigation, as has been made public, revealed that Full Tilt was in “very serious financial straits.” Not only had the U.S. Department of Justice seized a portion of the room’s funds, but several payment processors had walked away with cash as well. The DOJ’s seizure, according to Dean, totaled $160 million.
On why the AGCC licensed a company that could have been breaking U.S. law, Dean assessed, “AGCC takes the view, as do other reputable gambling regulators, that it cannot be responsible for interpreting or enforcing the laws of other jurisdictions. Instead, it places the onus on licensed operators, as is made clear in the license conditions, to conduct their operations in compliance with local laws.”
Dean’s report outlined that between 2008 and 2011, the AGCC regularly inspected Full Tilt’s licensees, “covering both technical and financial aspects.” The results were not all glowing: “These inspections and the surrounding correspondence revealed a number of shortcomings on the part of FTP, [having] to do with, for example, safeguards against underage gambling and anonymous funding of players’ accounts, lack of compliance resources, and inadequate information about payment processors.”
Despite the laundry list of shortcomings, the AGCC continued to let Full Tilt operate, as “the record of the surrounding regulator/licensee dialogue suggests that while FTP was slow to get to grips with some of these issues, it was not fundamentally unwilling to do so nor obstructive.” The AGCC’s last inspection of Full Tilt prior to Black Friday took place in October 2010, or six months prior.
Dean wrapped up his diatribe by imparting several “lessons to learn;” first up was the lack of resources at the AGCC. The Brit noted that the aftermath of Black Friday “placed a formidable burden on the AGCC Executive and Commissioners over and above their normal workload. In-house resources were severely stretched.”
Dean recommended that the AGCC establish more direct lines of communication with its licensees, as “throughout its dealings with FTP, AGCC relied to a significant extent on FTP’s external lawyers as a channel of communication. They played a prominent role in the arrangements for satisfying AGCC about the credentials of the owners of associated companies.” Dean suggested cutting out the “intermediaries” as much as possible.
In terms of regulator hearings, Dean commented, “AGCC is proposing to adopt an inquisitorial procedure for its regulatory hearings. I support this change.” He argued that such a system would be “simpler, more effective, and less costly” and that the AGCC should reexamine its general policy of holding public or private hearings.
Whereas PokerStars players were paid back in the days immediately following Black Friday, customers on Full Tilt, UB, and Absolute Poker remain empty-handed. On protecting players going forward, Dean observed, “AGCC has recently reviewed the options open to it and is tightening up its supervision of player funds on a risk-assessed basis.” What a “risk-assessed basis” entails is not known.
Finally, Dean recognized that his words likely hold little salvation for Full Tilt customers with frozen bankrolls: “This assessment will be of little comfort to the disaffected players who are still denied access to funds owed to them by FTP. The tribunal proceedings in 2011 were adjourned for several weeks to allow time for a rescue package to be negotiated. When this failed, the Commissioners then properly decided that because of the seriousness of the allegations, they should discharge their statutory duties without further delay.”
Read the AGCC Full Tilt report.
